Can Governments Afford These Interest Rates?

Merryn Somerset Webb (0:02)

Bloomberg Audio Studios.

John Stepek (0:04)

Podcasts.

Merryn Somerset Webb (0:05)

Radio. News.

Welcome to the Merryn Talks Money Market Wrap, where we talk about the biggest moves in the markets this week and what is driving them. I am Merryn Somerset Webb, UK Editor-at-Large.

John Stepek (0:26)

And I'm John Stepek, author of the My Still Newsletter and a Senior Reporter at Bloomberg.

Merryn Somerset Webb (0:31)

And still here, still here. John, this isn't going to be an AI podcast, but I've been watching you on Twitter. Well, I watch you on Twitter all the time, and it's just the way it is.

John Stepek (0:39)

I typically act, even by my standards.

Merryn Somerset Webb (0:41)

You really believe that AI could lead to our extinction. I don't, by the way, believe that for a second.

John Stepek (0:48)

No, no.

Merryn Somerset Webb (0:49)

Nonsense propaganda ahead of big IPOs.

John Stepek (0:51)

No, I think that, basically, I think AI is at risk of doing something if we don't hold the companies responsible for it, more responsible for what they're doing. And I think at the moment, they're trying to cover up the fact that they're actually not taking very good care with what they're doing.

Merryn Somerset Webb (1:07)

But they're also asking, aren't they, to have their liability taken away from them.

John Stepek (1:11)

Exactly.

Merryn Somerset Webb (1:11)

By saying, oh, we need to slow down. Oh, we need regulation. Oh, someone else needs to take responsibility for the bad stuff that we might do. Yeah, but yeah, this is very big corporations in the EU, isn't it?

John Stepek (1:24)

It is. And it's also their own in-house regulator, because all of these regulators, or sorry, the regulator that certainly Anthropic suggested, it's kind of has its roots in the effect of ultraism movement. I'm without getting too conspiratorial because obviously, people who believe the same things flock together. It's not, they won't have to be.

Merryn Somerset Webb (1:43)

But do you know, John, how we keep saying these days that one day something's a conspiracy theory and the next day it's true.

John Stepek (1:47)

Well, yeah, I do know that too.

Merryn Somerset Webb (1:48)

Be careful about how you label stuff these days.

John Stepek (1:51)

Exactly. But I do think, basically, there's a lot of people who believe and actually genuinely believe that AI is going to be a super being at some point. And to me, that's a very religious belief. I think that some of them are being partly taken for a ride, and there is also a lot of skewed incentives. But I do think, equally, that AI, as in misuse of LLMs and them charging ahead and trying to get them to work in certain ways, could cyberhack. And if it breaks something in the air traffic control system or something, that would be pretty bad. So it's not extinction level stuff, but it's kind of catastrophe stuff.

Merryn Somerset Webb (2:29)

John, it kind of seems to me, I keep thinking about this, and if you really believe, if you really believe that LLMs are that powerful, I don't, by the way, and if you really believe that it's possible that we will develop genuine AI as actual artificial intelligence instead of man-made data analysis, which is what it is at the moment. If you actually believe that, would you actually invest in AI? Of course you wouldn't. You'd spend all your money right now. Right now, because either we're all going to die or money isn't necessary because we move into a utopia, right? So you know, spend your money now, go on holiday.

Don't invest in these IPO's, it's a waste of time.

John Stepek (3:05)

It's an abundance outcome or a disaster outcome.

Merryn Somerset Webb (3:08)

Yeah, this is very...

John Stepek (3:09)

But yeah, I do agree. I think fundamentally the guys do need the hype. And I do find it amazing that, well, basically, there's two groups. There's people who seem to be totally naive to me, and they just take this all at face value and say, oh, well, even if there's a 1% chance it could wipe us out, we need to do this, this and this. And then there's the people who are still sort of saying that AI is basically nothing. And I think they're wrong as well. I mean, they're as wrong as the people who said the internet was no better than the fax machine were back in 2000 It was clearly a thing. I mean, I'm still coming down on, it's a big technological deal that's been massively overhyped, and we're probably, sorry, I was about to swear that spending too much capital on something that's not going to work. Wasn't very loud swear on these podcasts. I was going to say f***ing away, but no, no, okay. No, no, we're not, no, we're not. No loud swear on these podcasts. We need to play that one out. All right.